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Improving the Efficiency of the Later Stages of the Drug Development Process: Survey Results from the Industry, Academia, and the FDA

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Improving the Efficiency of the Later Stages of the Drug Development Process: Survey Results from the Industry, Academia, and the FDA Improving the Efficiency of the Later Stages of the Drug Development Process: Survey Results from the Industry, Academia, and the FDA By Adrian Hedley Benjamin Gottschalk B.S. Biochemistry Texas A&M University, 1997 M.B.A. MIT Sloan School of Management, 2003 SUBMITTED TO THE HARVARD-MIT DIVISION OF HEALTH SCIENCES AND TECHNOLOGY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN HEALTH SCIENCES AND TECHNOLOGY AT THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY JUNE 2004 © 2004 Massachusetts Institute of Technology All rights reserved Signature of Author: ____________________________________________________________ Harvard-MIT Division of Health Sciences and Technology May 7, 2004 Certified by: __________________________________________________________________ Ernst R. Berndt Professor of Applied Economics Thesis Co-supervisor Certified by: __________________________________________________________________ Joseph V. Bonventre Professor of Medicine and Health Sciences and Technology Co-Director, Harvard-MIT Division of Health Sciences and Technology Thesis Co-supervisor Accepted by: __________________________________________________________________ Martha Gray Professor of Medical and Electrical Engineering Co-Director, Harvard-MIT Division of Health Sciences and Technology Improving the Efficiency of the Later Stages of the Drug Development Process: Survey Results from the Industry, Academia, and the FDA By Adrian Hedley Benjamin Gottschalk Submitted to the Harvard-MIT Division of Health Sciences and Technology on May 7, 2004 in Partial Fulfillment of the Requirements for the Degree of Master of Science in Biomedical Enterprise ABSTRACT Drug development in the United States is a lengthy and expensive endeavor. It is estimated that average development times range from eleven to fifteen years and exceed costs of one billion dollars. The development pathway includes basic scientific discovery, pre-clinical testing in animals, clinical development in humans, and an application process. The Food and Drug Administration is responsible for the oversight and approval of drugs going through this process. Numerous financial and economic studies have been conducted that show the benefits to accelerating the drug development process. In 1992, the United States Congress enacted the Prescription Drug User Fee Act I, which mandated faster response times from the FDA in return for user fee payments to the FDA by the drug developing companies. Data on approval times for new drugs indicate that this process was indeed shortened. In contrast, the average drug development process prior to the filing of an application has been increasing in cost and time. The first purpose of this research is to quantify the benefits of accelerated new drug application review time under the Prescription Drug User Fee Acts I and II. The second purpose of the research is to investigate what industry and the FDA can do together to reduce the development process time between the IND and NDA without compromising patient safety and welfare, specifically the Phase II, Phase III, and NDA components. The research indicates that PDUFA has improved approval times in a statistically significant way. Furthermore, the financial and social benefits as measured using net present value have far exceeded the PDUFA costs. Quantitative and qualitative surveys of fifty individuals in large pharmaceutical and biotech companies resulted in the identification of several significant opportunities and useful suggestions for reducing development times in Phase II, Phase III, and the NDA. Specifically, company interviewees indicated that they were willing to pay additional monies for increased interaction and communication with the FDA from Phase II through the NDA in hopes of reducing information asymmetry and increasing information transparency. Other recommendations included a mandatory audit and review of a sample of NDAs post approval to identify best practices, implementation of metrics and performance tracking during clinical phases, and implementation of consistent project management and communication standards across therapeutic divisions. Thesis Co-supervisor: Ernst Berndt Title: Professor of Applied Economics Thesis Co-supervisor: Joseph Bonventre Title: Professor of Medicine and Health Sciences and Technology 2 DEDICATION To my parents, Frank and Karen: For all the sacrifices you made that have afforded me these incredible opportunities. To my brothers, Hilton and Michael: For all the moral support and encouragement. I know I can always depend on you. To Amy: For all the love and support that has sustained us through my graduate studies. I could not have done this without you. 3 ACKNOWLEDGEMENTS The author wishes to thank the following individuals for research assistance, thoughtful discussion, and aid in completing this thesis project: Dr. Matthew Strobeck (HST/MIT), Professor Ernst Berndt (MIT Sloan), Roy Gross (MIT), Dr. Tomas Philipson, (FDA), Ed Hass (FDA), Dr. Joseph Bonventre (HST), Professor Fiona Murray (MIT Sloan), Marsha Warren (HST), Bernadette Fendrock (HST), Dr. Howard Golub (HST), and Dr. Lee Simon (Harvard Medical School). Additionally, the author wishes to thank all the companies and their respective employees who agreed to be interviewed for the project or who helped organize the meetings. Their time and interest has made this project possible. Funding for travel, meals, and accommodations related to this thesis research were provided by general funds from the Harvard-MIT Division of Health Sciences and Technology. Ed Hass and Tomas Philipson provided the FDA NME data and significant research assistance. Without their aid, this project would not have been possible. A significant portion of the research was performed in conjunction with Professor Ernst Berndt and Dr. Matthew Strobeck. The author extends a special thanks to both of them for all their assistance in completing the research and this thesis. In the text of the thesis, the pronoun “we” is used to refer to research performed in conjunction with Professor Berndt and Dr. Strobeck. Any errors are the responsibility of the author alone. 4 BIOGRAPHICAL NOTE The author is a graduate of Texas A&M University (B.S. Biochemistry – 1997) and of the MIT Sloan School of Management (M.B.A. – 2003). At the time of this writing, the author is a graduate student enrolled in the Harvard-MIT Division of Health Science and Technology (HST)- MIT Sloan Biomedical Enterprise Program, a graduate program designed to meld the business, science, and clinical aspects of the biomedical field. The author has over three years of work experience as a consultant for PricewaterhouseCoopers in the area of petroleum information technology. Most recently, the author worked as a consultant to Allergan’s business development group and prior to that was an intern at Biogen Inc. in the business-planning group. The author can be contacted via e-mail at [email protected] for questions regarding this thesis. 5 TABLE OF CONTENTS Chapter 1: Introduction and Background ................................................................................................................9 Section 1.01 Motivation and Utility of Research..............................................................................................9 Section 1.02 Overview of Drug Development Time and Costs ......................................................................10 Section 1.03 Brief Background and History of PDUFA .................................................................................13 Section 1.04 Contract Research Organizations ...............................................................................................15 Section 1.05 Hypotheses .................................................................................................................................15 Section 1.06 Roadmap ....................................................................................................................................15 Chapter 2: Methods – Drug Approval and PDUFA Analysis ...............................................................................16 Section 2.01 Drug Database Construction ......................................................................................................16 Section 2.02 Statistical and Regression Calculations......................................................................................17 Section 2.03 Present Value Sales Calculations of PDUFA.............................................................................18 Section 2.04 Construction of NME Sales Curves ...........................................................................................19 Section 2.05 Present Value Cost Calculations of PDUFA ..............................................................................20 Section 2.06 PDUFA NPV Calculations and Analysis ...................................................................................21 Section 2.07 FDA Commissioner Analysis.....................................................................................................21 Chapter 3: Methods – Drug Development Surveys...............................................................................................23 Section 3.01 Assessment of Drug Development Issues ..................................................................................23 Section 3.02 Questionnaire Development.......................................................................................................24
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